Shared Services get Strategic
As more companies embrace Global Business Services centers, their value extends well beyond cost savings.
A decade ago, Sam Barani was at Salesforce cobbling together the first bricks in what would become a substantial organization-within-an-organization, a centralized provider of data processing and analytical services to multiple functions like finance, sales, HR and IT.
Having finished much of what he’d set out to do, Barani is doing it again, this time at Fresenius Medical Care, a publicly traded provider of kidney dialysis treatments that tallies more than 130,000 employees in 155 countries and generates approximately $20 billion in annual revenues. With his guidance, the company is building a world class Global Business Services (GBS) center, offering comprehensive services to function leaders and the C-Suite.
“The GBS center is positioned to become a true enterprise transformation organization, driving change management across the company,” said Barani, Global Chief Business Services Officer at Fresenius. “Once manual processes across the business are digitized and come into the GBS, we can analyze data on an end-to-end enterprise basis, offering transparency into things we couldn’t see before. We’re well on the way toward having this 360-degree view of the corporation.”
That view was far from the minds of IT leaders in the 1990s when administrative and support personnel in data-intensive functions like HR, finance and IT were burdened by the sharp uptick in manual data processing tasks. The work consumed their time and attention, as well as each function’s budget. The solution was to outsource the business processing to third-party providers offering lower-cost labor arbitrage in offshore locations.
By the mid-2000s, many midsized and larger companies had signed contracts with external business process outsourcing (BPO) providers. Another productivity concept—shared services centers—subsequently emerged. Instead of jettisoning business processes to an external vendor, shared services units were formed to perform these tasks internally on a function-by-function basis. The benefits were similar: Professionals were liberated from time-consuming administrative tasks, which were performed by lower-paid employees.
The shared services model itself is now progressing. “What used to be and remains an efficient process of services has evolved into an engine of transformation and a source of competitive advantage,” said Michael Heric, a partner and global leader for Global Business Services and Shared Services at management consultancy Bain & Company.
He’s referring to a GBS center. Unlike the shared services model, which is focused on a single function like HR or IT, a GBS center comprises specialists from multiple functions.
“What makes GBS centers a step-change from shared services are the cross-functional opportunities,” said Jonathan Silver, partner and leader of the global Shared Services and Corporation Business Functions practices at management consultancy McKinsey & Company. “Using technologies like process mining to capture data from transaction systems, a GBS center is positioned to bring next-step analytics and improved data visualization into a business on an end-to-end enterprise basis.”
One Step at a TimeThis is the work that Barani did back at Salesforce in 2013. His remit at the time was to deliver operational excellence to the company’s diverse functions, at scale. He began this journey by forming the GBS center to process the transactional tasks in finance. Other functions like HR, procurement and customer-facing support services soon joined finance in the GBS center, as did additional functions like sales, marketing and IT. Last to migrate over were legal and compliance.
Leveraging Salesforce’s cloud platform, the different functions benefitted from data standardization—the transformation of data flowing in from difference sources into a common format enabling users to process and analyze it. As time progressed, more data was digitized. Meanwhile, cognitive computing solutions like machine learning and advanced analytics became available.
Initially, data was analyzed at the GBS center on a function-by-function basis. By the time Barani moved on to Fresenius in April 2022, data was being analyzed on a cross-functional, end-to-end basis. Among the tools used at the GBS center were Salesforce Einstein, an AI platform combining machine learning algorithms and natural language processing (NLP) to analyze large volumes of complex data; Quip, an enabler of team-based collaborations around documents to improve productivity; and Tableau, a visual analytics business intelligence solution.
“We’d become what I’d hoped—a separate enterprise organization delivering advanced analytics to partners across the business to help solve their problems and make more insightful business decisions,” said Barani. As a provider of business intelligence, quality assurance, intelligent automation, change management, workforce organizational design and process excellence, the GBS center was perceived across the company as a crucial enabler of digital transformation.
Barani’s remit at Fresenius Medical Care is to repeat his success, from scratch. Much like at Salesforce, he wields significant influence. “The GBS center is strategic enough that my role as Chief Business Services Officer is C-level,” he said. “I’m not being asked to drive labor arbitrage by removing manual transactions here and there; I’m working closely with the board and other C-level executives to find opportunities for process efficiency, optimization and transparency.”
One such C-level peer is Fresenius’s CIO, Anjana Harve. “Anjana is my customer, in the sense that the GBS center serves her IT function processing needs,” said Barani. “She is also my partner, as we are both engaged in the company’s digital transformation. Just this morning, we discussed the roadmap for new technology next year in the GBS center. I rely on her to help me make such strategic decisions and to implement the technology solutions.”
Barani envisions the GBS center as the “backbone” of the global company, he said, given the breadth of administrative and analytical services it provides functions like IT, legal, compliance, HR and finance. At present, this work occurs on a centralized basis in the Philippines, India, Poland, Mexico, Brazil and Japan.
“We’re exploring adding other functions to the GBS that also can be run at scale, such as customer service, sales, marketing and technical services,” he said. “Anything that can be centralized and run at scale can be optimized.”
Other large publicly traded companies like retail pharmacy giant Walgreens Boots Alliance (WBA) are beginning to integrate shared services on a multi-function basis, on a path towards eventually creating a GBS center.
“We started with an IT shared services model here about three years ago, with TCS as our application support partner; that has evolved to where we subsequently entered the finance space in partnership with Genpact,” said Mark Slater, Business Services Technology Platform Information Officer (PIO) at WBA, with more than 300,000 employees and $132.5 billion in 2021 revenue.
“In terms of strategic value, we look at this as a very agile way to manage the business,” Slater said. “If we quickly need to scale for growth, we don’t suddenly need to hire a significant number of professionals across commoditized functions like IT and accounting to support it. Our third-party partners give us the opportunity to scale up or down depending on the need.”
As WBA’s Business Services Technology PIO, Slater is responsible for enabling the technologies underpinning each function’s business process needs in the shared services model. “We’ve established a transformation office within shared services to identify new opportunities to streamline and automate business processes across the functions. My job is to enable these objectives using technologies like AI and automation to optimize planned efficiencies and drive down costs,” he said.
Asked for an example, he pointed to WBA’s partnership with BlackLine, a provider of cloud-based finance and accounting services like account reconciliation, journal entry processing and accounts receivable automation.
“The name of the game for us is to bring in our third-party technology partners to provide the thought leadership and innovations we need for the shared services model to become ever more efficient and insightful, as they’re constantly creating new ways to do just that,” he said. “For example, BlackLine just announced enhancements to their intercompany management solution streamlining end-to-end intercompany operations. It’s now on our roadmap for future implementation.”
The Next IterationsMuch like BPO and shared services models, GBS centers themselves are evolving. “In some GBS centers, we’re seeing integrated multi-functional capabilities and higher-value services like RPA (robotic process automation), process mining, advanced analytics and digital twins,” said Heric. A digital twin is a virtual representation of a business process that serves as its real-time digital counterpart.
Given these sophisticated services, it is not uncommon, as Barani intimated, for a CIO and the GBS center leader to be joined at the hip. “IT and GBS increasingly are very tightly connected,” said Heric. “The history behind the GBS center was all about the shift to lower costs, but the reality is that with these benefits for the most part achieved, the future for GBS is digitizing data and automating processes on an enterprise basis. Who drives that? The CIO.”
This symbiotic relationship is evident in the career path for some GBS leaders. “We’re beginning to see situations where the head of shared services becomes the CIO or CTO, a bigger and more effective business executive,” said Silver.
As a GBS center becomes more of a strategic organization-within-an-organization, the talent needs are migrating toward people who not only mine, cleanse and process data, they are also equipped to squeeze out discerning insights from the data. “Thanks to automated technology solutions, manual processing is becoming much less, well, manual,” said Silver. “We’re seeing investments in upskilling people to use advanced analytics, RPA and other sophisticated tools.”
“Aside from this technical competence, staff also are being trained in problem-solving and communications to explain the insights they’ve gleaned in story-telling form to improve a function,” he added. “Exciting career paths are now at hand, with some GBS centers rotating people out to the business units.”
Heric concurred. “The people who come to work at a GBS center want to engage in higher value work. As more of the work they do is digitized and automated, they now have the opportunity to do some really interesting things. That’s good for another reason, since many GBS centers have endured high attrition rates,” he said, adding that manual work still occurs, “but it is becoming less and less.”
As for the professionals in business functions at companies with a GBS center or a shared services unit, they are now liberated to focus their efforts almost exclusively on the business and the company’s strategic vision.
“A finance person didn’t go to business school to spend 80 percent of their time manually collecting data, cleansing it and putting it into reports, yet that is what the average finance person is still doing, with only 20 percent spent generating business insights,” said Heric. “When you take that 80 percent and put it in a GBS, people work on the things they were trained to do and have passion for, which is where they should be spending their time.”
Russ Banham (email@example.com) is a contributing writer to Chief Executive.
Inspur Information partners with Atos Poland
Inspur Information, a leading IT infrastructure solutions provider, is expanding its local capabilities in Europe, signing a cooperation agreement with Atos Poland. As the latest channel supplier addition, Atos’s value-added expertise will further strengthen Inspur’s commitment to providing leading IT infrastructure solutions to the European market by strengthening Inspur’s local solutions and services capabilities for a superior customer experience.
A cooperation for leading IT infrastructure solutions
Atos Poland is a part of Atos Group, present on the Polish market since 2000. Currently delivering world class services in digital transformation, decarbonisation, cybersecurity, cloud and high-performance computing, providing tailored end-to-end solutions for all industries. Inspur Information and Atos Poland have formed a new partnership in IT infrastructure that will give Atos Poland complete access to Inspur’s comprehensive server portfolio and storage devices to provide the best possible IT solutions to its Polish customers with a potential of expansion to other European markets. Through this cooperation, Inspur Information will better leverage its rich experience and expertise in full-stack AI solutions, liquid-cooling technologies and emerging applications to empower the intelligent transformation of local customers, and power Atos’s leading IaaS, smart city, and IoT solutions.
"I am very happy to announce the cooperation agreement between Atos and Inspur,” said Jay Zhang, VP of Inspur Global Business and CEO of Inspur Europe. “Inspur and Atos joining forces will offer innovative and sustainable solutions to our clients in Poland with better service and accessibility than ever before.”
“As a global leader in digital transformation, we are thrilled to be using Inspur’s world-class IT infrastructure solutions in our tailored end-to-end IT solutions. Inspur has rich, innovative, and leading products which have been widely used for both the cloud and AI,” said Tomasz Radomski, CEO, Atos Polska. “Our customers will enjoy greater access to more powerful solutions that can handle any scenario.”
Strong channel partnerships for strong growth
“In Europe, for Europe” is Inspur’s commitment to the EU market. It is rooted in the concept that being local creates better solutions and better experiences for the customer. Inspur has made channel partnerships key to its business strategy, anticipating a majority of its business in Europe will come through channel partners over the next three years. Inspur Information is committed to providing leading products and solutions to European customers and together with its partners, plans to achieve a double-digit growth annually.
About Inspur Information
Inspur Information is a leading provider of data center infrastructure, cloud computing, and AI solutions. It is the world’s 2nd largest server manufacturer. Through engineering and innovation, Inspur Information delivers cutting-edge computing hardware design and extensive product offerings to address important technology sectors such as open computing, cloud data center, AI, and deep learning. Performance-optimized and purpose-built, our world-class solutions empower customers to tackle specific workloads and real-world challenges. To learn more, visit https://www.inspursystems.com.
Customertimes, an international leader in digital solutions and a global Salesforce integration and implementation partner, announced today that veteran IT executive Pawel Lopatka has joined the company as Strategic Portfolio Leader.
Mr. Lopatka brings a broad suite of skills and strategic expertise to his new role. He is regarded as one of the most effective, innovative managers working in Poland's IT sector, with deep experience in financial technology, retail, media, digital transformation, outsourcing, the Metaverse, and mergers & acquisitions.
Mr. Lopatka has spearheaded European initiatives for a range of global companies. He is a former Board Member of the Polish Chapter of the Project Management Institute and Poland's Association of Business Service Leaders.
Customertimes COO Brian Borack said Mr. Lopatka is central to the company's plans for accelerated European growth.
"Pawel is widely regarded for his strategic and operational acumen," said Mr. Borack. "We're scaling dramatically, and Pawel's vision and insight will be a key ingredient to blaze the trail for our clients, team, and organization."
Mr. Lopatka considers Customertimes an ideal fit for his skills and personal ethos.
"Customertimes' primary mission is implicit in the company's name – serving the customer above all else," said Mr. Lopatka. "That's a commitment I share. I'm devoted to driving customer success, ensuring quality delivery, and helping the company scale its client portfolio. Customertimes has a stellar reputation for top talent and delivering cutting-edge solutions on deadline. That's why it's growing rapidly, and why I'm proud to join the leadership team."
Infosys BPM, the business process management arm of Infosys (NSE: INFY) (BSE: INFY ) (NYSE: INFY), today launched the Center of AI and Automation, in collaboration with IBM, at the Infosys Business Experience Lounge in Poland, to bring digital excellence to enterprises globally. This announcement underscores two years of strong collaboration between Infosys BPM and IBM, delivering client success, identifying new use cases, and building solutions, to enable clients to innovate in hybrid cloud environments.
Formed in collaboration with IBM, this center will showcase a growing portfolio of data and AI solutions that are designed to automate and accelerate the hybrid cloud journey of global enterprises. The center will complement Infosys BPM service offerings that are built with a design thinking approach and deep domain expertise in data and AI technologies. The center launch also commemorates the 15th anniversary of Infosys BPM in Poland.
Focusing on a comprehensive suite of solutions, the experience center is well-positioned to be an innovation powerhouse, enabling enterprises to address complex business process challenges at scale across domains and industries. The center will showcase AI and automation solutions for business processes, and these solutions, including through automation, help lower costs, enhance productivity, and elevate customer experience.
End-to-end automation capabilities, backed by credible data and insights, will empower enterprises to analyze workflows, design AI-infused apps with low-code tooling, assign tasks to bots, and track performance on the go. Clients will get hands-on access to various digital solution offerings across the space of data, AI, and hyperautomation, such as IBM CloudPak for Data, IBM Watson Assistant & IBM Watson Discovery, IBM SaferPayments, IBM Blockchain, IBM Sterling Supply Chain, IBM Risk and Fraud Detection software, and Envizi for Sustainability, along with key solutions from Infosys BPM, including Infosys Intelligent Document Processing, Infosys Interaction Analytics, Infosys Multilingual Conversational AI, Infosys Accounts Payable on Cloud, Infosys Cortex, Infosys Material Master Harmonization, and Infosys Data Workbench, among many others.
Marcin Gajdziński, Country General Manager, IBM Poland and Baltics, said, "IBM is focused on providing clients and valued partners such as Infosys the key capabilities needed to scale AI for business. As evidence of the importance of the IBM Ecosystem strategy, the newly opened Center of AI powered by IBM Watson in Lodz, Poland, will provide our joint clients significant support in building the digital economy, as well as new skills and expertise in the field of AI and hybrid cloud."
Kapil Jain, Executive Vice President and Global Head of Sales and Enterprise Capability, Infosys BPM, said, "We are proud to launch the Center of AI and Automation at the Infosys Business Experience Lounge in Poland. As organizations continue to transform their cloud environments, they will increasingly need to rely on a diverse ecosystem of partners and supporting technologies to unlock enhanced hyper-productivity, agility, and scale. This collaboration with IBM Watson, through end-to-end hybrid cloud offerings, robust AI capabilities, domain-specific use cases, and business functional contextualization, will enable organizations to better navigate the complexities of digital transformation, leading to enhanced business value."
Novocure opens new SSC in Krakow
On 19th October Novocure opened a new office at Fabryczna Office Park in Krakow, Poland. The new site's Director is Pawel Mlecko.
Armatis, one of the largest international companies operating in the field of customer service and sales, has officially opened its new office in Gdansk, as previously announced. The company wants to employ over 300 employees in the new location over the next few years. The Tricity branch will become one of the largest outsourcing centres for multilingual customer service and sales in Poland.
Armatis has already been running pilot projects since July this year, in the newly established branch. Yesterday’s official opening of the office was an opportunity for a broader presentation of the company’s plans related to the Tricity. The new office is not only a success for the company itself, but also for Invest in Pomerania, a non-profit local government initiative coordinated by the Pomerania Development Agency, which serves investors in the region.
– Before choosing Gdansk as the new location for our office, we carefully analysed the market and cooperated with Invest in Pomerania. The conclusion was one: this region has enormous potential because of the talent pool. This is shown, for example, by one of Antal’s recent surveys, according to which Gdansk is the second city in Poland where people are most likely to move because of its very good quality of life. This is very important for us, because we plan to employ over 300 people here in the next few years and successively develop our presence on the Tricity market – says Krzysztof Lewinski, CEO of Armatis Polska.
Gdansk office a multilingual hub
The employees of the Gdansk office will be primarily involved in projects carried out for a number of global brands. The services of multilingual service centres are currently in high demand because customers prefer companies that communicate with them in their own language, not in English alone. This is confirmed by research by the European Commission, according to which 82% of consumers are more likely to purchase products if they are offered in their native language. Even their high level of English proficiency does not matter.
– The Tricity – which is a significant academic centre and also attracts a number of young people from other parts of Poland and Europe – gives us access to educated and language-proficient candidates. On this basis, we are building another multilingual hub to satisfy our growth plans – continues Krzysztof Lewiński.
The linguistic potential in the region is also highlighted by Mieczysław Struk, Marshall of the Pomeranian Voivodeship:
– The presence of companies such as Armatis enriches the labour market offer of our region. We have students and graduates of language studies on site, who will have the opportunity to put their knowledge into practice and embark on a career path in the BSS. The multilingual centre serves people from all around the world and employees in Pomerania are perfectly qualified to competently meet the expectations of even the most demanding ones.
Job opportunities for beginners and specialists
Armatis currently employs around 2,000 employees and associates in six offices in Poland. In addition to Gdansk, these include Bielsko-Biala, Katowice, Krakow, Stalowa Wola and Warsaw. The company implements projects for well-known brands from sectors such as banking, tourism, e-commerce, media and telecommunications, and aviation.
– We offer job opportunities for both experienced specialists and people taking their first steps on the labour market. They can count on professional initial training, which provides a wealth of knowledge in the area of customer service and sales, as well as development training during employment. The advantage of working for our company is a clear career path, a competitive salary and additional performance-based bonuses, as well as a number of non-wage benefits. There is also the possibility to work remotely – currently 30% of our people, who prefer this form of professional activity, work in this mode – enumerates Krzysztof Lewiński.
This year’s winners include:
In the Customer Initiative category, the prize was awarded to Infosys Ltd., which implemented a self-service portal for its client to increase the efficiency of customer contact. The portal uses 3 chatbots, interactive forms and intuitive tutorials to significantly reduce the time taken to resolve technical issues raised by users, who are also able to resolve some issues independently. Approximately 6,000 technical issues are resolved monthly through the portal, with the average time to resolve a request reduced from 15 to 5 minutes. The ability to resolve their requests in this way has also contributed to a reduction in customer calls by a full 30%. This allowed the client to gain additional time to focus on more strategic tasks, which also meant direct financial benefits of millions of dollars.
In the Education category, the award winner was BlueLink International CZ, which designed and deployed the S.T.E.P. (Strive Towards Excellence Program), a digital training program designed to develop employees professionally. It is a hybrid program that combines a traditional Learning Management System with digital coaching and consists of a wide range of tools and resources that enable managers to support and train internal talent by creating personalized learning programs. S.T.E.P. is fully integrated into the company’s digital environment based on Microsoft technologies and is currently used by over 500 employees with over 700 hours of training available in various formats, whether as e-learning, virtual workshop, webinar or podcast. Some of the content is created internally, and some in collaboration with external partners, including Google grow, International Study Program, The Global Exec, School 42, Udemy, Edx, Coursera and the Czech Association for Financial Management (CAFIN), among others. S.T.E.P. does not only bring professional development to employees but also increases client satisfaction (by 9 percentage points) and efficiency (by 8 percentage points). At the same time, employee satisfaction increased, and turnover decreased by 5.6%. The roll-out of the program to the entire BlueLink Group, which includes a total of 2,000 employees, is currently being prepared.
In the ESG Towards Resilience category, the award was given to Conectart, which implemented a wide range of projects, the most remarkable of which was an educational campaign for the elderly, on which Conectart collaborated with the Police of the Czech Republic. As part of the campaign, Conectart developed and launched a fully automated voicebot at its own expense, providing seniors with advice on spotting a scam call and a guide on how to behave during and after it. Within one month, the voicebot called and informed over 200,000 seniors, 93% of whom listened to the call to the end. Fraudulent calls targeting seniors cause tens of millions of crowns of financial damage each year.
In the Employer Branding & People Engagement category, Accenture was the most successful company with its Stronger Every Day mobile app, which aimed to help connect employees during the pandemic. For 5 weeks, people could participate in various sports, cultural or gourmet challenges and enjoy special rewards after completing them. In addition to connecting 266 colleagues and the 17,000 kilometres walked together, the company donated CZK 230,000 to four non-governmental charities as part of this programme.
In the Innovative Workplace & Remote Working Strategies category, CTP was awarded for its Brno-based co-working centre Clubco. The idea to build a modern high-tech co-working space as an alternative to traditional corporate offices was conceived in response to growing demand and as a complement to the portfolio alongside industrial and office parks. The result is Clubco in the centre of Brno, which on 4,000 m2 provides facilities for freelancers and entrepreneurs as well as small and medium-sized companies. These businesses are starting to offer co-working to their employees as part of new strategies in access to remote working, such as Flex & Core, which combines a smaller main office with membership in one or more co-working centres. The spaces were opened during the pandemic, which did not make their start any easier, but thanks to the wide range of membership options, they quickly became very popular in Brno.
The winner in the Value Creation category was Deutsche Telekom Services Europe Czech Republic for a project aimed at eliminating data silos and unifying data on the Salesforce Cloud platform to further streamline customer relationship management. The project included an app that summarizes all customer interactions and a transparent database with all IT apps operated by the company. The Key Account Manager is now able to save up to 3 hours per week that he used to spend searching for documents. The project has eliminated file sharing through different channels and replaced inefficient email communication with a single integrated platform. The newly implemented fully digital offer process is automatically managed by the system, including the e-signature process, allowing for more efficient acquisition of new customers.
In the Business Innovation category, Knorr-Bremse Services Europe was awarded for its project transforming the indirect purchasing operating model from nationally oriented to process-oriented, increasing the maturity of the department to the industry benchmark and preparing the department’s transformation to Purchase to Pay – merging with the accounts department. Knorr-Bremse, which provides indirect purchasing services for all Knorr-Bremse’s European locations, achieved a 23% increase in productivity by streamlining processes. The change in purchasing tactics resulted in a new negotiating team that achieved 88% more savings in 2021 than in 2020. Knorr-Bremse was supported in the project by Accenture.
Medtronic earned the second diamond in the Business Innovation category for its virtual assistant PABLO (Payroll Automation By Logical Optimization), which took over the manual agenda in monthly payroll processing across the EMEA region (Europe, Middle East, and Africa). The initiative was driven by the company’s Dutch payroll department, which worked with teams from Credit Services, IT and HR to create the solution. PABLO saved the five-person team 25 hours of work per month and significantly increased internal customer satisfaction. The pilot project was run in 10 company entities, and the solution is currently implemented in 25 entities and is expected to cover all 65 Medtronic entities in the future.
Róbert Ésik, the former CEO of the Hungarian Investment Promotion Agency (HIPA) joined EY on September 1, the Big Four company tells the Budapest Business Journal.
Ésik's task at EY is to support companies in finding the ideal investment location for planned investments in Europe, the Middle East, India, and Africa.
The recently appointed partner has led the Hungarian Investment Promotion Agency (HIPA) since 2014. During this period, together with his team, he has managed about 1,900 investment projects in the amount of EUR 31.3 billion, resulting in more than 120 000 new workplaces.
Under the leadership of Ésik, HIPA received various international recognitions, and significant developments were carried out with the participation of the agency in key economic sectors including the automotive industry, electronics industry, food industry, life sciences, business services, and the information and communication technology (ICT) sector.
Prior to his time at HIPA, he spent more than 15 years in various management positions at large global ICT companies including Alcatel, Siemens, Nokia, and Amazon Web Services.
He graduated as an economist at the Corvinus University of Budapest and earned a master’s degree at the Université Panthéon Assas in Paris.
"Róbert Ésik is one of the key Hungarian figures in the area of strengthening external economic relations and driving investments. I am pleased that EY’s clients will be supported by his expansive professional experience from now on," highlighted Botond Rencz, international leader of EY.
"Róbert’s prior experiences make him the most appropriate person to provide effective support to companies making their investment decisions, also relating to cross-country projects. His arrival will further strengthen EY Hungary’s role and significance in the global economy," he added.
"At EY, I will have the opportunity to utilize the broad experience I have managed to gain during my time in industry and in my most recent role as the CEO of HIPA. My goal remains unchanged – to help companies execute their growth strategies, to find an ideal location for planned investment projects, as well as to contribute to the creation of new jobs and opportunities with high added value for the future," emphasized Ésik, partner of EY’s global location services and incentives (GLSI) responsible for the EMEIA region.
SSCs evolve Aalongside Hungary’s economy
No one should doubt the importance of the shared service center to the Hungarian economy. In its way, the evolution of the sector (how its name has changed, even the battle to get potential employees to understand what it does) is a metaphor for the development of Hungary’s own economy.
There was a time when it was all about cost. SSCs began to appear here because multinationals realized it was cheaper to employ someone to answer a simple question or perform a basic function in Budapest than in most Western European capitals. Those same multinationals had to be careful about how excited they were to announce 50 jobs in Budapest because it usually meant 50 jobs had been axed back home.
They came to Budapest because its bright lights have always been a giant magnet, drawing talent to it. That answers a riddle I struggled with when I first came here. Hungarians, traditionally, have not scored well in terms of the foreign languages they speak, yet the managers of the SSCs I spoke with unfailingly said one of the attractions of Budapest was the availability of young graduates with good language skills. The young are generally better than the old regarding languages, and Budapest could effectively recruit from across the country.
But just as Hungary has purposefully moved away from a “Made in Hungary” mentality to “Invented in Hungary,” what the government calls a paradigm shift from manufacturing jobs to value-added roles, so those services centers have morphed from a workbench setting to something intellectually more challenging.
It started with myth-busting. Sector players realized they had to convince people that an SSC was not synonymous with a call center. They started reaching out to ever younger year groups at school to explain what they did and what they could offer. They were even prepared to band together to evangelize: think of AmCham Hungary and its BSS Hungary Working Group. BSS, standing for the business services sector, became part of the evolution, too, the new name aiming to reflect a fresh reality but also cement a different reputation.
The government has been a willing partner in this, realizing the SSCs, BSCs, Global Business Centers, and Centers of Excellence offer it the possibility of reversing the brain drain by demonstrating that exciting career opportunities and reasonable pay levels can be found here, just as easily as abroad. And with good universities scattered around the country, there are inducements it can offer to set up a center in Debrecen or Szeged, for example, and spread those roles across the regions.
Those multinationals who have been here the longest talk of earning the trust of home boards, of proving they have the talents and skills and disciplines to do more varied work here, to run end-to-end processes, to trouble-shoot, to handle research and design, of creating a virtuous circle where the better they perform, the more complex the roles they can attract. There is a balance point here. I am told that Hungary still offers a cost advantage, but the whole concept of convergence, of the country inching towards parity with the EU average, must eventually bring that into question. Then it will be a case of who can do the best job. Then Hungary, which has always prided itself on its brain power, will genuinely be standing on its own feet.
This article was first published in the Budapest Business Journal print issue of November 18, 2022.
Although base salary remains the most critical factor, growing insecurity has changed job preferences: career prospects and overtime pay have overtaken flexible working hours and a predictable work schedule in job seekers’ list of priorities, PwC Hungary says.
The Big Four consultancy compiled an annual survey of the job preferences of employees in Hungary for the sixth time this year, quizzing nearly 25,000 respondents. It has also announced its Most Attractive Employer awards.
PwC Hungary asked high school students over 16 (grades 11-12), higher education students, and employees what they look for in a job, their expectations of employers, and the employer brands they find most attractive in Hungary. Although data collection is ongoing, the awards were given based on responses received between September 12 and October 31, 2022.
In an uncertain geopolitical and economic environment, PwC found key employee preferences have changed significantly compared to previous years. Financial security has become more important than work-life balance or meeting social needs.
In line with this, items related to well-being have declined compared to the year before, PwC says. Although the possibility to work from home and human factors such as good relations with colleagues and superiors remain essential, a secure and stable workplace is now more important.
Examining the responses of school pupils and university students, they perceive their work and career as a lesser part of their identity and the employer-employee relationship as more transactional. Base salary remains the highest preference, followed by overtime and career opportunities. They are less keen to work from home, demonstrating a need to separate work from their personal life.
“For younger workers, employers should pay particular attention to developing workplace relationships and employee engagement, failing which the transactional approach can easily be detrimental to retention,” explains Márta Reguly, head of PwC’s HR consulting team.
“The results also show that young workers have much lower expectations of the ratio of home office. This could be due to fatigue induced by online learning in higher education or that they prefer on-the-job training in person,” she adds. This year’s survey also asked employees about new topics, such as a four-day workweek. While the idea itself is popular, and there are ongoing experiments to introduce it in Hungary, the survey shows that it is not a high priority for employees when considered along with other compensation elements. One reason for this may be that in the current economic climate, it is considered less of a realistic option, PwC says.
Volatile WorldThe study showed that environmental factors and the so-called VUCA (Volatile, Uncertain, Complex, Ambiguous) world have a stressful effect on employees that may have lessened their flexibility, openness, and social expectations.
According to Reguly, bosses should pay increased attention to supporting employees during this period to lay the foundations for the company’s resumed growth in a more favorable economic environment.
“Employees look to their employers for the stability and security they lack in their daily lives. This comes at a time when the economic environment presents companies with significant challenges. It is important for company leaders to address these needs in their communication, maintaining transparency and informing employees about the company’s situation and possibilities,” the PwC PR specialist warns.
“In addition to employee expectations, it is also crucial to pay attention to future-proofing the company through leadership development, maintaining flexibility, and the capacity to innovate. These values can give companies a significant competitive advantage once the crisis is over, depending on how much they retain in these years,” says Reguly.
BP Hungary won PWC's Award for Top Employer in the SSC sector.
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11th annual CEE Business Services Awards
Build it or Buy It?: Outsourcing in Poland and Central Eastern Europe
BSC Directors VIP WineTastings, June-September 2023
BSC Charity Beach Volleyball Tournaments - June and August 2023